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Emissions reduction: Ambition Vz reality

Sonal Desai


India’s carbon emissions are predicted to rise due to increased fossil fuel use in industry, power generation, transportation, and energy consumption.

By 2050, energy demand is expected to surpass any other region, driven by additional factors like urbanization and built space expansion.

Despite this, India’s investments in clean energy have increased rapidly in response to aggressive targets, according to IEA’s World Energy Investment report.

India’s carbon emissions and growth:

• India’s carbon emissions are expected to rise due to increased fossil fuel use in industry, power generation, and transportation.
• India’s annual GHG emissions have nearly tripled since the turn of the century, reaching a record high of 2.7 GtCO₂ in 2022, according to Statista.
• Global energy think tank, Ember Report placed India as the world’s third-largest solar power producer in 2023, surpassing Japan.
• India ranks 7th in the Climate Change Performance Index (CCPI), up one spot from the previous year.

The growth story:

Indian clean energy investment surged to $68 billion in 2023, a 40% increase from 2016 to 2020. Solar PV and low-emission power generation accounted for half. Fossil fuel investments reached $33 billion.

The country ranks high in GHG emissions and energy use but medium in climate policy and renewable energy. India is on track to meet 2°C benchmarks despite low per capita emissions.

The NDC impact:

The country is attempting to meet its national determined contribution (NDC) through long-term policies promoting renewable energy and domestic manufacturing.

However, its heavy reliance on coal, oil, and gas contributes to greenhouse gas emissions and air pollution. India’s high petrol and diesel taxes are disputed, with some describing them as effective but others pointing to government dependence. The country’s energy system, largely reliant on imported fossil fuels, may strain, leading to increased carbon emissions.

Furthermore, India and China’s recent change to the cover decision at COP28, stating ‘phase down’ instead of ‘phase out’, has slowed global efforts to end the fossil fuel era.

Large-scale renewable energy projects negatively impact local communities through land grabs and unequal distribution. Policymakers should focus on transformative adaptation, disaster risk management, ecosystem-based solutions, and equity.

Expert take:

Experts argue that India’s ambitious goal of achieving net-zero emissions by 2070 lacks ambition and political will.

They recommend a bottom-up approach, including tribal and rural communities, faster coal phase-out, reduced gas reliance, and expanded renewable energy.

They also suggest a move to reach net-zero by 2050 and create affordable, accessible, and sustainable infrastructure. India has auctioned over 20 gigawatts of renewable energy capacity in 2023.


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Global Energy Investment to Exceed $3T by 2024

WriteCanvas News


Global energy investment is projected to surpass $3 trillion by 2024, with $2 trillion allocated to infrastructure and clean energy technologies.

Trends:

The least developed economies lag due to low base levels and high debt servicing by 2024:
• Global investment in clean energy will still be 15%
• Solar photovoltaic technology will cost more than $500 billion.
• Domestic capital in energy financing varies, with larger EMDE nations like Brazil and India dominating.
• Local capital providers use government-assisted commercial lender costs or sustainable debt issuance.
• In 2023, early-stage businesses received more energy-related venture capital funding than hardware companies.
• US-based start-ups raised more money than other countries, with China, Europe, and India representing growing shares.
• Indian start-ups have the greatest success in the mobility sector, while Chinese start-ups have the largest share in energy storage and batteries.
• Clean energy innovation investment in EMDE did not significantly increase globally in 2023.

Data:

On the manufacturing side, in 2023, the Chinese solar PV industry experienced price reductions and overcapacity concerns, leading to declining profit margins.

Cost pressures forced expansion plans in the US, India, and Europe. Unabated fossil fuel generation reached over 110 GW in 2022, with India increasing new coal-fired power plants by double. Large-scale hydropower plants’ FIDs reached 32 GW, indicating future potential.

Spending on renewable energy has outpaced that on oil, gas, and coal since 2020, despite increased financing costs and supply chain constraints that have been somewhat offset by declining prices.

On the other hand, there has been a notable surge in the investments made in renewable power in India, Brazil, Southeast Asia, and Africa; by 2024, clean energy investments in Africa are expected to nearly double.

These are the findings of a new World Energy Investment report that draws attention to the disparities in clean energy investments, which are predicted to increase by 50% from 2020 to $320 billion in 2024.

Challenges:

Utility-scale renewables approvals have increased, indicating improvements in construction and supply chain.

However, advanced economies still face challenges in land acquisition, permitting, and grid connection. China aims to reduce renewable energy, but Brazil and India lead in FIDs outside China. Despite accelerated electrification, EMDE outside China needs further progress. Battery storage investment doubled in 2023, with Australia and Japan leading.

Although LNG has been approved, fossil fuel investments remain a significant portion. Refinery investment remained flat in 2022-2023, expected to decrease in 2024 due to long lead times and demand uncertainty. Future coal capacity will be primarily in China, Nigeria, and the Middle East. China’s renewable energy adoption could impact global coal investment by 2024. An additional 0.8 mb/d of refining capacity is anticipated to come online, most likely from China and India.

The impact on refining margins and the way forward:

Despite significant cracks in the middle distillate, refining margins decreased in 2023.

Investment decisions in new refineries are challenging due to high upfront costs and long lead times, with future investments likely to focus on the Middle East, China, and India.

However, the report shows consistent growth in private capital and R&D funding, with developing economies and emerging markets (EMDE) underrepresented in energy innovation investments.

EMDE accounted for 3% of corporate R&D expenditures and 6% of public R&D spending in 2023. Indian start-ups raised 85% of energy venture capital.


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